GE hikes dividend for 2nd time this year

By IBT Staff Reporter On 12/10/10 AT 2:56 PM

General Electric Co raised its quarterly dividend by 2 cents per share to 14 cents, its second increase in the payout this year and a fresh sign the largest U.S. conglomerate is gaining confidence in the outlook for its finance business.

I think they're signaling a little better environment for the segment of the business that was using cash, which was the financial side said Peter Klein at Fifth Third Asset Management.

So they're getting some back and they're going to give some to us.

GE, whose shares were up 3 percent on Friday, last raised its dividend in July, also by 2 cents a share.

Together with the July hike, GE has now raised its dividend by 37 percent so far this year. Still, it remains well below the 31-cent quarterly rate that was in place before Chief Executive Officer Jeff Immelt slashed the payout in 2009, amid the financial crisis.

Oliver Pursche, co-portfolio manager of the GMG Defensive Beta Fund, predicted other top multinationals would follow GE's lead to appease shareholders who have been pleading with them to stop hoarding cash.

But Pursche said he also believed GE's move also reflected a sense of relief among U.S. business leaders that the Obama administration and the resurgent Republican opposition in Congress had reached a deal on taxes.

They are growing less concerned about the economic recovery, Pursche said.

GE shares were up 51 cents or 3 percent at $17.64 on the New York Stock Exchange on Friday afternoon.

(Reporting by Scott Malone; additional reporting by James B. Kelleher in Chicago; editing by Lisa Von Ahn and Matthew Lewis)